Thursday, May 19, 2022

Mike Hosking: We're writing a recipe for economic ruin

There was some sobering economic reality at my place yesterday.

My street had a truck vacuum in it, sucking all the crap out of the drains, so there was the obligatory 800 metres of cones and two stop go people.

Stop/go people have had a 28 percent wage rise on average this past year. I know this because I told you yesterday - the Seek job ad numbers tell us the 28 percent has taken them to about $46,000 a year.

Do you know that journalists - varies I assume from organisation to organisation - start in the low $40,000s, so flipping a stop/go sign is more valuable than journalism.

Weird, eh?

Then Kate shows me the 4 packets of 300 grams of mince she has bought. It's about 40 bucks for a bit over 1 kilogram of mince. It's in 300 grams she says because putting mince in a 1 kilo pack would freak people out. She is right, but the 4 small packets freaked me out.

The checkout operators have got a 28 percent wage rise too; they are on mid $40,000s as well. Without wanting to start a fight, I'd argue there is more skill required on check outs than there is in lollipop flipping. Either way, both earn more than a starting journalist

I'd also argue, without wanting to start a fight, that the machines where you do the checking out yourself need expanding upon, because part of the reason mince is so expensive is because the people who tell you how much it is and take your money have had a 28 percent wage rise

And as happy as you might be for people earning more, the cold hard economic reality is we aren't making any more or doing any better - we are simply putting the price of stuff up.

Everyone else, of course, involved with the Government has had wage rises, and for a number of them minimum wages and benefits have all gone up several times. Once again, for no good productivity. The reason? Just because we did.

And when the lollipop person is on mid $40,000s, people on mid $40,000s quite rightly want mid $50,000s if not more, and so it goes.

Nothing wrong with a high wage economy, but you have to actually do something for it.

We are in a warped world now, where work of minimal use and skill is better paid than what you might call a profession.

A world where reward comes from closed borders and a determination to limit the labour supply.

This is the recipe for economic ruin. It's why today's Budget will be in deficit, why the debt will be higher, and why the growth numbers will be anaemic if not non-existent.

A nurse starts at $53,000, a teacher $52,000, a dental assistant $46,000 and a lollipop person? $46,000.

You've got to be kidding me.

Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings.


DeeM said...

Picking a journalist to compare with the stop-go person and checkout operator was your first mistake, Mike.
Most journos these days contribute nothing because they all say the same thing so why bother. At least the stop-go person prevents you from having an accident - very useful.
Don't know where you buy your mince from - $40/kilo! Try New World - it's only $20/kilo. You're being ripped off - or maybe its organic, low carbon, etc!

You are right though - a high(er) wage economy is fine if you are creating the wealth to support it. NZ doesn't really do that very well anymore.
This budget could well spell the end of Labour because all it will do is drive inflation and prices higher.

Anonymous said...

i think half of the wage inflation in NZ is tied to real estate costs (rental or mortgage). bringing that down as a long term strategy will allow us to control wage expectations.
the sad reality is that rents/mortgages are in a narrow band, with the only change being what you get for the money. so 500/wk is a default outgo - you could get apartment near CBD or a rowhouse on the outskirts or a bigger house far south. a wider range of options at lower price points would provide more options to the minimum wage worker who need not spend 50% of income on housing...

Terry Morrissey said...

You really should not have mentioned journos Mike. Those who take $55 million from the taxpayer in graft are not a reall good example to choose.
"It's about 40 bucks for a bit over 1 kilogram of mince." I remember when we used to buy mince for the cat. Now no cat either. It went the way this government should go. I had far more respect for the cat than this labour cult, but you have to get rid of unnecessary liabilities.

Jigsaw said...

Comparisons of wages/salaries is not new. I recall teaching in the early 1960's when a student left school at 15 from primary school and was paid more that I was as a teacher when his job was to periodicaly join two wires together while working in a bush gang. The two wires then set off and alarm. That was his job-to sit and wait for a signal then join the wires and he got 18 pounds a week- way more than I did as a primary school teacher. Someone calculated that I would be in my late 50's before my pay at that rate ever caught up.
I agree -journalists are a poor example- in everyway!